Japanese shares fell on Thursday but other Asian markets were mixed, with little direction provided by Wall Street, where the Dow closed only marginally higher despite a good response at a five-year Treasury auction.
Similarly, the dollar was firmer but not substantially higher after the auction, which was closely watched after dismal results at a sale of three-year notes earlier in the week spread gloom in both stocks and bond markets.
Gold and oil prices were almost unchanged in Asian trade.
Japanese stocks closed 0.63 percent down, awaiting results from telecom giant NTT DoCoMo Inc amid trade limited by the summer holidays.
"Wall Street is entering into a correction as summer doldrums kick in, and this keeps foreigners shying away from the Tokyo market.
"Domestic players are also preparing for the obon summer holiday next week. That means we're at a standstill," said Tatsuyuki Kawasaki, a director at Kaneyama Securities' equities trading division.
Koichi Seki, equity manager at Chuo Securities said: "There is still lingering concern about the direction New York is going, and with a dearth of domestic trading incentives, activity is mostly focused on individual stocks, but that's not going to be enough to move the indices much."
Analysts also said that there was little chance of major falls, with trading volume low and several technical factors likely to provide support.
A Morgan Stanley index of stock markets elsewhere in the region .MSCIAPJ was up 0.03 percent on the day. Singapore, Taiwan, Indonesia and Thailand were up, and most other markets in the region were flat.
STRONG TREASURY AUCTION
The dollar was trading at 120.07/10 yen compared with New York's closing level of 120.22/30 yen. It rose as high as 120.45 yen during U.S. hours.
Wednesday's U.S. Treasury sale of about $18 billion in five-year bonds attracted bids for 2.48 times the amount on offer, the strongest since an August 2000 auction that had a bid-to-cover ratio of 3.06. The ratio was also above the 1.82 average of the previous four auctions.
"The five-year auction fared much better than Tuesday's three-year auction so the market reacted positively and bought dollars," said Mitsuru Sahara, a vice president at UFJ Bank's forex dealing group.
"But the rise stopped around 120.50 yen and fell back because there were no incentives to buy the dollar beyond that level."
And although the bond auction removed immediate worries about interest rates, there appeared to be little joy from other U.S. indicators.
"Everyone says the U.S. economy is good. But U.S. shares, especially Nasdaq shares, are dull in recent days," said Kota Kimura, assistant forex manager at Shinkin Central Bank.
The Nasdaq composite index dropped 1.24 percent to a one-month low of 1,652.68 on Wednesday. The Dow ended 0.28 percent up.
A further $18 billion of 10-year notes is up for sale later on Thursday and bond prices eased in Asian trade ahead of that auction. The 10-year note was last at 94-23/32, yielding 4.29 percent, compared to late New York's 94-28/32 and 4.27 percent.
The summer doldrums and the quiet forex market also affected bullion. Spot gold was at $350.50/1.00 at 2:10 a.m. EDT, down slightly from $351.20/95 last quoted in New York.
On oil markets, NYMEX crude prices were unchanged after profit taking and bearish U.S. inventory data pushed prices down 1.6 percent to below $32 a barrel on Wednesday.
Front-month September was almost flat at $31.69 cents a barrel at 2:15 a.m. EDT. The contract fell 52 cents to $31.70 on Wednesday and dropped 90 cents from its intraday high to the close.
Similarly, the dollar was firmer but not substantially higher after the auction, which was closely watched after dismal results at a sale of three-year notes earlier in the week spread gloom in both stocks and bond markets.
Gold and oil prices were almost unchanged in Asian trade.
Japanese stocks closed 0.63 percent down, awaiting results from telecom giant NTT DoCoMo Inc amid trade limited by the summer holidays.
"Wall Street is entering into a correction as summer doldrums kick in, and this keeps foreigners shying away from the Tokyo market.
"Domestic players are also preparing for the obon summer holiday next week. That means we're at a standstill," said Tatsuyuki Kawasaki, a director at Kaneyama Securities' equities trading division.
Koichi Seki, equity manager at Chuo Securities said: "There is still lingering concern about the direction New York is going, and with a dearth of domestic trading incentives, activity is mostly focused on individual stocks, but that's not going to be enough to move the indices much."
Analysts also said that there was little chance of major falls, with trading volume low and several technical factors likely to provide support.
A Morgan Stanley index of stock markets elsewhere in the region .MSCIAPJ was up 0.03 percent on the day. Singapore, Taiwan, Indonesia and Thailand were up, and most other markets in the region were flat.
STRONG TREASURY AUCTION
The dollar was trading at 120.07/10 yen compared with New York's closing level of 120.22/30 yen. It rose as high as 120.45 yen during U.S. hours.
Wednesday's U.S. Treasury sale of about $18 billion in five-year bonds attracted bids for 2.48 times the amount on offer, the strongest since an August 2000 auction that had a bid-to-cover ratio of 3.06. The ratio was also above the 1.82 average of the previous four auctions.
"The five-year auction fared much better than Tuesday's three-year auction so the market reacted positively and bought dollars," said Mitsuru Sahara, a vice president at UFJ Bank's forex dealing group.
"But the rise stopped around 120.50 yen and fell back because there were no incentives to buy the dollar beyond that level."
And although the bond auction removed immediate worries about interest rates, there appeared to be little joy from other U.S. indicators.
"Everyone says the U.S. economy is good. But U.S. shares, especially Nasdaq shares, are dull in recent days," said Kota Kimura, assistant forex manager at Shinkin Central Bank.
The Nasdaq composite index dropped 1.24 percent to a one-month low of 1,652.68 on Wednesday. The Dow ended 0.28 percent up.
A further $18 billion of 10-year notes is up for sale later on Thursday and bond prices eased in Asian trade ahead of that auction. The 10-year note was last at 94-23/32, yielding 4.29 percent, compared to late New York's 94-28/32 and 4.27 percent.
The summer doldrums and the quiet forex market also affected bullion. Spot gold was at $350.50/1.00 at 2:10 a.m. EDT, down slightly from $351.20/95 last quoted in New York.
On oil markets, NYMEX crude prices were unchanged after profit taking and bearish U.S. inventory data pushed prices down 1.6 percent to below $32 a barrel on Wednesday.
Front-month September was almost flat at $31.69 cents a barrel at 2:15 a.m. EDT. The contract fell 52 cents to $31.70 on Wednesday and dropped 90 cents from its intraday high to the close.
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1275.09
